Hanover to let new CEO fill CFO position

Matt Volpini Fred Eppinger, outgoing president and CEO, Hanover Insurance Group

Michael Angelini, chairman of the board of directors, Hanover Insurance Group

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By Laura Finaldi

Tragedy and circumstance has led the Hanover Insurance Group in Worcester to simultaneously search for candidates to fill its top two executive positions but only one of those will be filled by the search committee.

The replacement for outgoing President and CEO Fred Eppinger could be in place by June 30, but – even though the board of directors is doing a search – the chief financial officer position will remain vacant until the top slot is filled, said Eppinger.

The purpose is to let the new CEO pick the new CFO, Eppinger said. The board will provide a short list of candidates, but the position should really be filled with the input of the new person who will lead the company.

The search for a new CEO started in September when Eppinger announced his retirement after 13 years leading the company. Eppinger oversaw the rise of the company stock price by more than 250 percent, as the Hanover went from a down-on-its-luck firm to a global player in the property and casualty insurance business. In 2015, it had its top performing year, with $250 million in operating income.

“Now with the momentum, and the stock price as high as it's ever been, and the earnings are great, and with the team in place, I knew it was a good time to leave,” he said.

The search for a new CFO started a month later when CFO David B. Greenfield died unexpectedly at age 53. In late October, Hanover was able to lure previous CFO Eugene Bullis out of retirement to fill in on a temporary basis, but his contract runs for six months with the option for more if necessary.

“David was very, very well loved and very appreciated. He had been here five years, and so people have to go through it – they have to mourn,” Eppinger said. “It makes you pause, just because you always think, 'What if?' But it also makes the reasons why [my wife] Patty and I thought about this at some level, too. You think about your mortality as a person, time with your family, all of those things.”

The new CEO

The search for a new top executive is being conducted by the Hanover board of directors, led by Chairman Michael Angelini, although Eppinger has advised on who he thinks should fill the position.

Eppinger didn't go into too much detail about where they are in the process, but he did say that there has been local and international interest in the position, as well as interest from people who work for companies comparable in size to Hanover and larger. The search for a new CFO is happening alongside the CEO search, so the board can have a list of vetted names ready for the new CEO's consideration on his or her first day.

Angelini said the search committee has narrowed down the pool of candidates from “an armful to a handful” of people, but new applications are still being considered.

“We're committed to doing this right, not doing it quickly – we're not facing any deadline. We've got a great team of people, and Fred is still in place, so we're doing well, and performing well,” he said. “We want to find the best person we can find, rather than find a person who's available right now.”

Above all else, Eppinger said it is important that whoever replaces him is interested in growing a company, not just running it. A good CEO, he said, keeps his or her eye on where the company should be in two or three years, and helps employees focused on the day-to-day to do the same.

“My folks that are running businesses day-to-day, they've got a lot of stuff day-to-day that they've got to do. Part of what you want to see is somebody who can really help those folks think long-term,” Eppinger said. “I used to say early on, 'Give me three hours on a Friday … I know you're bogged down with day-to-day all the time, but at least a couple three hours every week, take a step back and say, 'Are we doing the right stuff?'”

The CEO also needs to be able to bring people together, he said, and to represent the institution in the outside world, as Eppinger has raised the involvement of Hanover in the Worcester community and throughout Central Massachusetts.

Not only has Eppinger sharpened the Hanover's community focus, but he's also completely transformed the company's culture, Angelini said, and because of him, it has a great team in place.

“As successful as he has been as CEO, one person doesn't define an organization. He has a great team of leaders, and his legacy is just that – a thriving company that is distinctive, responsible, responsive and with a team that makes it reliable,” he said. “So, it doesn't mean that Fred leaving the company is going to cause us any harm.”

Although he's set a tentative end date of June 30 for himself, Eppinger said he might end up leaving sooner or later than that. It all depends on when the board finds a suitable replacement.

After that, though, he does not plan on being involved at Hanover.

“It would be unfair to the next leader for me to be around,” Eppinger said.

A 13-year legacy

When Eppinger took the reigns at the Hanover in 2003, things were not going well. The company's focus was narrowing, the now-defunct life insurance division was falling apart, and recruiting was a nightmare. At the time, he said, he had to be a very hands-on leader.

Over those 13 years, the Hanover has grown into a lucrative enterprise that has expanded internationally while maintaining its strong community roots. Revenues have more than doubled, the company's portfolio of services has grown, and – perhaps most importantly – employees are happy and proud of where they work.

Because the company is in such a strong position, Eppinger said, he feels comfortable stepping down.